What Health Care Providers and Facilities Should Know About the PREP Act’s “Covered Countermeasures”

February 1, 2021 | Podcasts

As many businesses and those in the health care industry wonder what protections, if any, they have against COVID-19-related litigation claims, Jackson Walker’s Healthcare practice chair, Virginia Mimmack, and healthcare litigator Brad Nitschke discuss the patchwork laws and regulations of federal, state, and local governments that may provide immunity from these claims. While the PREP Act allows for certain “covered countermeasures” for litigation claims, the expansion of telehealth services beyond traditional state borders raises questions about what protections are provided for COVID-19-related activities performed by telehealth workers.

Greg Lambert: Hi, everyone. I’m Greg Lambert, it’s February 1st, and this is Jackson Walker Fast Takes. As we move into a new phase of COVID with vaccine distributions underway and hospitalization numbers stabilizing in some areas, one concern that has resurfaced in the recent weeks is the risk of litigation related to COVID—who can be sued and who’s immune, especially within the frontline workers of the health care field. There has been a lot of back and forth in Congress and state legislatures about immunity from liability, and it can be hard to tell exactly where it’s all landed. So, I brought in Jackson Walker healthcare litigator Brad Nitschke as well as JW’s Head of Healthcare Practice, Virginia Mimmack, and they’re here to talk about the current state of immunity from COVID claims for the health care industry. Thank you both for talking with me.

Virginia Mimmack: Thanks for having us.

Brad Nitschke: Thanks for having us, Greg.

Greg Lambert: Brad, let’s start with you. Can you just give us a current lay of the land?

Brad Nitschke: Sure, thanks. It’s true–this is an issue that we’re hearing about from clients now, especially health care providers and facilities. Everybody wants to know if they’re going to get sued for COVID. It makes sense that we’re hearing those questions now. The COVID relief package that Congress passed a few weeks ago didn’t include broad immunity from COVID claims for all businesses, although there was a lot of discussion about that possibility in the run-up to the final vote. In Texas earlier this week, our Legislature is in its session currently, and we heard from a leading business group and a state senator some talk about plans for a statutory immunity bill that would cover COVID claims filed in Texas, but so far no bill has been filed and we’re not quite sure what the parameters of that will be if it passes. For most businesses, this question of liability for COVID-related claims is still very much up in the air, except in those handful of states that have passed state laws in recent months to address that question.

The good news for those in health care, though, is that at the federal level, they may already be covered by immunity provided by the PREP Act. The PREP Act is not a new law at the federal level—it’s been around since 2005. It allows the Secretary of Health and Human Services (HHS) to extend immunity from liability to health care manufacturers, distributors, providers, and some other actors who are helping to administer what are called “covered countermeasures” in response to a public health emergency. Over the course of 2020, since the COVID pandemic began, we’ve seen a series of declarations from HHS that extend that PREP Act immunity in connection with COVID. So, the big picture at the federal level right now is that if you’re a “covered person” under the PREP Act, and that’s a defined term, the statute provides really broad immunity from suit and from liability for claims arising out of the design, development, manufacture, distribution, sale, prescribing, administration, or use of “covered countermeasures.” The sole exception to that immunity, if you’re covered, is for a claim for death or serious bodily injury caused by willful misconduct, which the statute says is something more than recklessness and more than negligence. So, “covered countermeasures” are defined very broadly in the statute. It’s not just things you’d expect – like developing a COVID vaccine or administering a COVID vaccine or administering monoclonal antibody treatments – but it also extends, in the context of COVID, to products that are made, designed, or procured to diagnose or treat a condition caused by something that was meant to diagnose, prevent, treat, or cure COVID. So, it extends to treatments for, let’s say, an adverse reaction to a COVID vaccine. It also extends to other diseases, conditions, or threats that may have been caused by COVID—some of the follow-on, secondary conditions that have been linked to COVID infection. One of the really interesting expansions of this term, in connection with COVID, is that “covered countermeasures” also include a treatment related to the decrease in the rate of childhood immunizations and the resulting increase in the rate of infectious diseases. So, there’s been a drop in children getting their immunizations on schedule because parents have not wanted to go to the doctor during COVID, and what HHS has decided is that if that results in a higher rate of infectious diseases, countermeasures meant to fight that may be covered by the PREP Act immunity from liability as well.

The “covered countermeasures” are pretty broad. “Covered persons”—right?—those who can take advantage of PREP Act immunity, it’s also a fairly broad term, especially in the context of COVID. It applies to manufacturers, distributors, program planners, and what the statute calls “qualified persons,” which is basically health care providers who are authorized to prescribe or deliver countermeasures under state law. But in the context of COVID, HHS has expanded that term to include pharmacists under certain conditions who were involved in vaccination programs and providers practicing under emergency authorizations, so maybe not necessarily licensed in the state where they’re practicing. One really key expansion here that’s interesting is—and that sort of helps illustrate some of the questions that the PREP Act creates as we move into this next phase of living long-term with COVID as a reality—is including providers who are offering telehealth services including across state lines in the scope of “covered persons.”

Greg Lambert: Thank you, Brad, for getting us all caught up on where we are at the current moment.

Virginia, let’s turn it over to you. As a health care expert who spends a lot of time advising clients on the digital delivery of health care, what does the Public Readiness and Emergency Preparedness Act, or the PREP Act that Brad had been mentioning, already have to offer telehealth providers?

Virginia Mimmack: Great question, Greg. The PREP Act has a really interesting application in telehealth. Just by way of background, the general rule in medicine is that you have to be licensed in the state where the patient is located when you are providing that care. For most of history, this wasn’t an issue because doctors lived in one state and provided care in that state, unless they lived on the border of two states. They typically only had one license. But now that telemedicine has exploded, a lot of doctors want to be able to provide services in a lot of states. You can sit at your computer in Texas, but provide services in the other 49 states. But to do that, you have to be licensed in each of those states and meet each of those states licensing rules. The same applies for all health care providers. As you can imagine, every state has its own take on what it means to be licensed in their state and what obligations you have to meet to be licensed and continue to be licensed in the state. So, this was an area of frustration in telemedicine for a long time – that it was so difficult for people to maintain licensure in so many different states. Then COVID comes along and suddenly there is a real need for telemedicine providers to step up and provide additional care across state lines and to fill in some of the gaps that existed. Governors, you know, tried to pass these emergency orders to say, ‘Okay, we’re going to let people from other states apply to have a license on an emergency basis in our state,’ but that process was also still taking time because there’s a lot of paperwork involved. What the PREP Act did is it basically cut all the red tape, and it said if you are here to treat COVID and that is what you are trying to combat with your treatment, then you have immunity if you provide services in a state where you don’t currently have a license. And so it allows this cross-border treatment both in person – if you wanted to get in your car and go help at a hospital that was overwhelmed – or via telemedicine. So, this was a huge step.

I think the important takeaway though, from a PREP Act standpoint, is this immunity only applies if you are actually treating COVID. If you are taking urgent care calls as a telemedicine provider, and you are assisting people who think they may have COVID, or you’re doing COVID screenings, or you’re prescribing initial medication for COVID, or if you set up a vaccine tent somewhere, or you’ve set up an easy way for people to get COVID tests online, all of those I think sort of clearly fit within the PREP Act immunity. But if you’re starting to get on the outer edges a little bit, and you’re starting to make arguments about how what you do relates to COVID, I think that’s where these things get tricky. I think that’s where you’re really going to want to talk to a lawyer and find out if what you’re doing fits under the PREP Act. So again, if you’re a telemedicine provider and you say, ‘Well, I want to provide services in other states, because other doctors are so busy treating COVID patients that they don’t have time to treat their normal patients, so I want to help them out with that,’ I don’t think that’s as clear cut at all under the PREP Act. I think that could lead to some future disputes.

Greg Lambert: Thank you, Virginia.

Brad, since we don’t have any type of broad federal immunity as of yet and we have a patchwork of the 50 states, in your work with a number of clients across the health care industry and your litigation practice, what are you expecting will lead to litigation in this area?

Brad Nitschke: Yeah, it’s a great question. I think unless and until Congress passes broad immunity for all or most businesses from COVID infection claims, or we have 50 states that do that in lieu of Congress, where we’re going to see litigation is people trying to define the outer boundaries of immunity under the PREP Act, because it’s really probably the broadest nationwide immunity that potentially applies to these cases. I think the scope of these really broad definitions of “covered persons” and “covered countermeasures” is going to be the topic of a lot of discussion and probably a fair amount of litigation going forward. The reality is that COVID is a part of every aspect of delivering health care right now—it’s hard to conceive of anything related to health care that’s not somehow affected by COVID. If you break your hip and go to a physical therapist for rehab, your broken hip may not have been caused by COVID, but that PT is still wearing full PPE because of COVID, and you may have to get your temperature check before you go to physical therapy because of COVID, so it’s just pervasive. And I think an important challenge for those in health care—providers, of course, but also facilities, manufacturers, and their vendors and suppliers—is not to assume that a particular activity is covered by PREP Act immunity just “because COVID.” In other words, PREP Act immunity is broad, but it’s not without limits. I think we’ll see disputes and probably litigation about business activities that are arguably on the outer edges of what may be covered by the PREP Act, but one party to a dispute argues that they fall outside. So, the physical therapist treating a broken hip but wearing COVID PPE: Is his or her negligence in caring for that broken hip preempted by the PREP Act? If you have a health care facility that’s affected by COVID, as all health care facilities are right now, and it gets into a payment dispute with a construction contractor, is that contractor’s claim for payment from the COVID-affected hospital preempted by the PREP Act? I think those are the types of issues that the courts are going to have to work out in the months and years to come. You know, the reality is there will be some disputes that come up in health care in the near future that aren’t subject to PREP Act immunity, even though the COVID response really dominates so much of a day-to-day work in health care, and courts are just going to have to work that out.

At this end of the timeline, though, early in this next phase of life with COVID, I think it’s really important for businesses and for providers who may be acting around the edges or really outside the COVID response, but within health care, to sit down with their attorney and really vet how the PREP Act may apply. You know, does it give them a defense to a claim? Does it give a counterparty who they’re relying on to perform a defense to a claim for nonperformance? I think now is the time to really vet those assumptions so that if Congress doesn’t pass sweeping immunity, and if the 50 states don’t pass sweeping immunity under state law, you’ve got a good understanding going into a transaction or going into a new operational model of what your exposure to litigation risk really is.

Greg Lambert: Virginia Mimmack and Brad Nitschke, thank you once again for talking with me.

Virginia Mimmack: Sure. Thanks for having us.

Brad Nitschke: Thanks, Greg.

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The music is by Eve Searls.

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